Claiming Your Tax Rebate
As you may well know, the First Time Home Buyer Tax Credit has been extended and expanded. The IRS has also issued a few guidelines for you to follow. Number one on the list: if you have purchased a new home since November 6, 2009 and you qualify for the tax rebate, you will need to wait until a revised Form 5405 is issued by the IRS later this month. The IRS has made changes to the old form and added instructions on claiming your Tax Rebate check. If you purchased after November 6th, and sent in your request for the Tax Rebate, it will be in vain. The IRS issued a bulletin before Thanksgiving that clearly states all rebate request must be made on the NEW Form 5405 - which will be coming out later this month.
Not sure if you qualify for the credit? Here it is in a nutshell:
You must be a first time home buyer (haven’t owned a home in the past 5 years) OR if you have owned a home for 5 of the past 8 years, and are buying a new home, the new home must be used as your principal residence.
The tax credit is equal to 10% of the purchase price with first time buyers receiving a credit up to $8,000, and current home owners receiving up to $6,500.
The new home must be under contract by April 30, 2011 and the transaction must be closed by June 30, 2011.
Members of the Armed Forces and diplomatic personnel serving in foreign countries will get an extra year to purchase a home. They will be given until April 30, 2011 to have a home under contract and until June 30, 2011 to close the transaction.
The new home cannot cost more than $800,000.
Single family homes, multi-family homes and condominiums are included in the credit, provided the purchaser occupies the property.
No one under 18 can qualify for the credit.
If you are able to be claimed as a dependent on someone else’s taxes, you will not qualify for the credit.
There are income restrictions, $125,000 for a single person and $225,000 for persons filing jointly. A single person making between $125,000-$145,000 and joint filers making between $225,000-$245,000 may qualify for phased down credit amounts.
Finally, if you are thinking of co-signing, but are unsure if this will effect the eligibility of a first time buyer. The IRS states that the ineligible co-purchaser does not effect the tax credit for the first time buyer, as long as none of the credit goes to that person.
Questions or concerns about the credit OR just want some help and guidance with your new home purchase? Contact The Kuchta’s - Kelly & Colleen at 262-894-6512 or send us an email to ckuchta@shorewest.com. We are both Accredited Buyer’s Agents and are happy to go the extra mile to help you find the home that is right for you. Visit us online at thekuchtas.shorewest.com
Posted by:
Colleen Kuchta
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Lisa Rossetto
Yes, you can still take advantage of first-time homebuyer’s tax credit!
